Skirting U.S. sanctions, Europeans open new trade channel to Iran

By John Irish and Riham Alkousaa

 

Iran's President Hassan Rouhani speaks during his visit to the shrine of the founder of the Islamic Republic, Ayatollah Ruhollah Khomeini, south of Tehran, Iran, January 30, 2019. Official President website/Handout via REUTERS

 

PARIS/BERLIN (Reuters) - France, Germany and Britain have opened a new channel for non-dollar trade with Iran to avert U.S. sanctions, although diplomats say it is unlikely to allow for the big transactions that Tehran says it needs to keep a nuclear deal afloat.

 

Washington's major European allies opposed last year's decision by U.S. President Donald Trump to abandon the 2015 deal, under which international sanctions on Iran were lifted in return for Tehran accepting curbs on its nuclear programme.

 

Iran has threatened to pull out of the deal unless the European powers enable it to receive economic benefits. The Europeans have promised to help companies do business with Iran as long as it abides by the deal.

 

"It is a political act," French Foreign Minister Jean-Yves Le Drian told reporters after a meeting of EU counterparts in Bucharest. "It is a gesture to protect European companies."

 

Washington says that, although Iran has met the terms, the accord was too generous, failing to rein in Iran's ballistic missile programme or curb its regional meddling.

 

New U.S. sanctions have largely succeeded in persuading European companies to abandon business with Iran, and Washington said on Thursday that it did not expect the EU effort, known as the Special Purpose Vehicle (SPV), to change that.

 

"We do not expect the SPV will in any way impact our maximum economic pressure campaign," a U.S. State Department spokeswoman said.

 

"The United States questions the efficacy of the SPV and remains committed to fully enforcing its sanctions," said a senior Trump administration who spoke on condition of anonymity.

 

The European trade vehicle was conceived as a way to help match Iranian oil and gas exports against purchases of EU goods. However, those ambitions have been toned down, with diplomats saying that, realistically, it will be used only for smaller trade, for example of humanitarian products or food.

 

"It won't change things dramatically, but it's an important political message to Iran to show that we are determined to save the JCPOA (Iran deal) and also to the United States to show we defend our interests despite their extraterritorial sanctions," one European diplomat said.

 

The EU has spent months preparing the system and it will take several months more to become operational.

 

Britain's Jeremy Hunt said the three countries were working closely with Tehran to finalise arrangements: "Registration is a big step, but there is still more work to be done," Hunt said.

 

RELATIONS WORSENING

The Instrument In Support Of Trade Exchanges, or INSTEX, is registered in France and will be headed by German banker Per Fischer, a former Commerzbank director. The three European powers are shareholders and hope other states will join later, although a senior German official said this was not imminent.

 

Iranian Deputy Foreign Minister Abbas Araqchi said the mechanism was a good first step.

 

The European powers must now establish a budget for INSTEX and define its rules. Iran must also set up a mirror company.

 

"It seems that Iran should set up the same system inside Iran to organise rial transactions for Iranian companies," Araqchi was quoted as saying by the semi-official Tasnim news agency.

 

The U.S. Embassy in Germany said it did not expect INSTEX to blunt its effort to pile economic pressure on Tehran.

 

Even as European powers and the European Union have worked to preserve the nuclear deal, relations with Tehran have been worsening. The EU this month imposed its first sanctions on Iran since the nuclear pact, in response to the ballistic missile tests and assassination plots on European soil.

 

In a symbolic move, the EU added two Iranian individuals and an Iranian intelligence unit to its terrorist list.

 

The three big European powers are also assessing whether to push for new sanctions on Iran over its missile programme, diplomats have told Reuters.

 

"We are clear; this commitment does not in any way preclude us from addressing Iran's hostile and destabilising activities," Hunt said.

 

(Additional reporting by Andrea Shalal and Paul Carrel in Berlin, Robin Emmott and Alissa de Carbonel in Brussels and Parisa Hafezi in Dubai and Arshad Mohammed in Washington; writing by Madeline Chambers and John Irish; editing by Kevin Liffey and James Dalgleish)

 

 

-- © Copyright Reuters 2019-02-01

Good news now let them all put trade sanctions on USA see how they feel other countries meddling with them.

What a wonderful world we could have if the Americans would only vote for an American president who had no influence in the rest of the world.

I know it's unrealistic but I like the idea. He can even build a big wall around their nation and spend all that money which they use now to interfere with the rest of the world to repair their own country. If they do this for a decade or two there might even be some progress.

And hopefully god will bless America, they really need every blessing they can get.

US national security team told senate the other day that Iran is upholding their end of the treaty, which of course made Donald explode and rant. Iran has it's fingers in other pies in the region, that is given and understood. The treaty was to stop nukes, and it is doing that.

So awful that major world events can be shaped by one man with no knowledge, understanding, reality based decisions. Trump is a 'clear and present danger" and should be removed. I would prefer election showing him the door, but he is like an angry drunk 8 year old with hand grenades and machine guns.

Good for Europe. They can take some of the money they make and provide stability in the area.

45 minutes ago, OneMoreFarang said:

And hopefully god will bless America

100% sure he doesn't give a <deleted> about it and especially when douche political figures invoke this childish phrase in their speeches.

"France, Germany and Britain have opened a new channel for non-dollar trade with Iran to avert U.S. sanctions"

 

"The three big European powers are also assessing whether to push for new sanctions on Iran over its missile programme".

 

Mixed messages, anyone?